The mounting cost of food

March 30, 2008
The mounting cost of food

Next time you restock your pantry, be prepared for sticker shock. The price of wheat has more than tripled during the past 10 months, making Americans' daily bread -- and bagels and pizza and pasta -- feel a little likAnd baked goods aren't the only ones getting more expensive: Experts expect about 80 percent of grocery prices will spike, too, and could remain steep for years because wheat and other grains are used to feed cattle, poultry and dairy cows.

"It's going to affect everything . . . impact on every section of the grocery store," said Michael Bittel, senior vice president of King Arthur Flour Co. in Norwich, Vt.

Recession is a given. Can we avoid depression

March 24, 2008

Recession is a given. Can we avoid depression

When economist Robert Parks predicted early last week that there was more than a 60 percent probability the current financial meltdown in the United States would lead to the "Bush depression," his phone began ringing like crazy with calls from the media.

Mr. Parks, however, doubts the cuts will do much to boost the economy. Rather, he sees a further steep fall in housing prices, continued major deficits in the federal budget and in the international trade balance, a tumbling dollar, and a weak stock market leading to a genuine depression with 30 to 35 percent unemployment, greater poverty, more loss of homes, plunging bond and stock prices, even some starvation. Parks, now a Pace University finance professor (for years he was chief economist at three Wall Street firms), says he has never predicted a depression before. His e-mail to press acquaintances sparked a lot of interest, as Parks was daring to express publicly the financial community's worst nightmare.

Things Are Falling Apart As You Read This

March 17, 2008
Things Are Falling Apart As You Read This

But the Fed rode to Bear's rescue anyway, fearing that the collapse of a major investment bank would cause panic in the markets and wreak havoc with the wider economy. Fed officials knew that they were doing a bad thing, but believed that the alternative would be even worse.

As Bear goes, so will go the rest of the financial system. And if history is any guide, the coming taxpayer-financed bailout will end up costing a lot of money.

US manufacturing is competing by trimming workers and wages

February 15, 2008
US manufacturing is competing by trimming workers and wages

A new round of cutbacks by Detroit's automakers carries a larger message – that America's manufacturing workers are under new pressure in jobs where labor unions had once been able to command middle-class wages for assembly-line jobs.

The point was punctuated this week as General Motors announced the largest ever annual loss by a maker of automobiles. In a bid to restore profitability, GM said it would offer incentives to convince older, highly paid assembly workers to retire early. Ford and Chrysler are pursuing similar worker buyouts.

U.S. Economy: Confidence Drops, Factories Stagnate

February 15, 2008
U.S. Economy: Confidence Drops, Factories Stagnate

Feb. 15 (Bloomberg) -- Confidence among American consumers slumped to the lowest level since 1992 and factory output failed to increase, indicating the damage from the housing contraction is pushing the economy toward a recession.

The Reuters/University of Michigan index of consumer sentiment fell to 69.6 in February from 78.4 the previous month. The Federal Reserve said manufacturing production was unchanged in January after two months of gains, while a gauge of activity at New York factories contracted this month.

Economic Good Times Were Mostly a Mirage

January 23, 2008
Economic Good Times Were Mostly a Mirage

The great moderation now seems to have depended — in part — on a huge speculative bubble, first in stocks and then real estate, that hid the economy's rough edges. Everyone from first-time home buyers to Wall Street chief executives made bets they did not fully understand, and then spent money as if those bets couldn't go bad. For the past 16 years, American consumers have increased their overall spending every single quarter, which is almost twice as long as any previous streak.

Now, some worry, comes the payback. Martin Feldstein, the éminence grise of Republican economists, says he is concerned that the economy "could slip into a recession and that the recession could be a long, deep, severe one." In Monday's Democratic presidential debate, Barack Obama made the same argument: "We could be sliding into an extraordinary recession," he said.

Poll: economy tops war in election

January 15, 2008
Poll: economy tops war in election

Washington; and battle creek, mich. - Within the space of a few weeks, economic worries have displaced the Iraq war as the top political issue in the United States, upending the carefully laid plans of presidential candidates and causing Congress and the White House to consider emergency measures intended to prevent – or moderate – a looming recession.

In one sense the rise of pocketbook issues reflects a glimmer of good news. Reduced violence in Baghdad has made Iraq seem a less pressing concern to many US voters.

No Quick Fix to Downturn

January 13, 2008
No Quick Fix to Downturn

As leaders in Washington turn their attention to efforts to avert a looming downturn, many economists suggest that it may already be too late to change the course of the economy over the first half of the year, if not longer.

With a wave of negative signs gathering force, economists, policy makers and investors are debating just how much the economy could be damaged in 2008. Huge and complex, the American economy has in recent years been aided by a global web of finance so elaborate that no one seems capable of fully comprehending it. That makes it all but impossible to predict how much the economy can be expected to fall before it stabilizes.

The Economy and the New Year

January 2, 2008
The Economy and the New Year

When Mr. Bush says the economy is strong, he is generally referring to rising wages, low unemployment and what he calls healthy economic growth. But wages have either fallen or failed to outpace inflation during most of his tenure. Job creation is now slowing from a pace that has long been subpar. Economic growth is also braking, if not contracting. In any event, growth during the Bush years has not been healthy; rather, it has been abnormally lopsided. Corporate profits have soared (until recently) and the rich have become richer, while most Americans have treaded water or lost ground, their troubling circumstances masked by an unprecedented borrowing binge, now exacting its toll.

Republicans Can't Manage the Economy

August 20, 2007
Republicans Can't Manage the Economy

• Lyndon B. Johnson's "Great Society" created robust economic expansion, first in both GDP and personal income growth. He also reduced unemployment from 5.3% to 3.4%. Economic growth remained robust through most of LBJ's presidency.
  
  
• John F. Kennedy campaigned on the idea of getting America moving again, and he did. Under Kennedy, America entered its largest sustained expansion since WWII. GDP and personal income growth were second only to Johnson, all with minimal inflation. Contrary to Republican attempts to say Kennedy's tax cuts are like Bush's, Kennedy's were targeted at middle and lower incomes.


• The economy added 10 million jobs under Jimmy Carter despite high inflation; Carter ranks first in job creation next to Clinton during just four years in office. Carter also reduced government spending as a percentage of GDP.


• Harry Truman's second term saw the fastest GDP growth and the sharpest reduction in unemployment of any president surveyed (of course, FDR's post Hoover-depression New Deal jobs are first).

US dollar plummets to record low against euro

July 23, 2007
US dollar plummets to record low against euro

THE US dollar touched a new record low against the euro in Asian trade today, hit by jitters about the US housing market troubles and recent falls in global share prices, dealers said.

The euro rose to as high as 1.3845 US dollars in early Tokyo trading, just beating its previous all-time best of 1.3843 seen on Friday.

By late morning in Asia, the euro stood at 1.3830 US dollars, up from 1.3820 on Friday in New York.

The dollar was at 120.93 yen, close to a six-week low, after 121.26 in New York. The euro eased to 167.21 yen from 167.70.

U.S. economy to contract in coming month

May 17, 2007
U.S. economy to contract in coming month

NEW YORK (AP) - A gauge of future economic activity showed the U.S. economy will slow in coming months, reversing recent gains and suggesting higher gas prices and a sluggish construction industry are beginning to take their toll.

The Conference Board said Thursday its index of leading economic indicators dropped 0.5 per cent, higher than the 0.1 decline analysts were expecting. The reading is designed to forecast economic activity over the next three to six months.

Crisis looms for entire economy

March 20, 2007
Crisis looms for entire economy

If Washington doesn't address the rapidly building multi-trillion-dollar crisis in residential mortgage defaults, its paralysis will help trigger a national economic recession that could touch every homeowner.

The crisis has been building for months - if not years. Experts agree it is a result of banks and other lenders' granting home loans to people who were not truly able to afford the payments. Now, with the national economy in a slide, the number of mortgage defaults is rising at an alarming rate.

Before we engage in the usual finger-pointing over how we got into this mess, let's agree on an aggressive course of action to mitigate it. Our nation must recognize there will be economic pain if the problem goes unaddressed; there will be residential foreclosures and billions of dollars in write-offs as auditors discover that many of these mortgages can never be fully paid down. Many families will find that they may have to consolidate their living space if they hope to hold on to at least one viable residential dwelling.

Dems lead on every major issue.

February 22, 2007
Dems lead on every major issue.

                                                     Both    Neither   No
                                 Bush    Dems   (vol.)   (vol.)    op.
a. The situation in Iraq              34      54       *        9       2
b. campaign against terrorism         39      52       2        5       2
c. The economy                        36      56       1        6       2
d. The federal budget                 32      59       1        6       2
e. Health care                        25      62       1        9       4

Economy tethers Bush budget

February 5, 2007
Economy tethers Bush budget

A business slowdown or recession, an increase in inflation and interest rates, a reversal in the
willingness of foreign investors to keep buying U.S. Treasury bonds could put the skids on what
has been a strong economy.

Meanwhile, spiraling payouts in guaranteed federal benefits for Social Security and Medicare as
baby boomers retire "is going to be the single largest economic problem that we face," said Mark
Zandi, chief economist for at Moody's Economy.com.

"Deficits look OK today," Zandi said. "But what happens at a time when the economy isn't
operating at full tilt?"

When Bush took office in 2001, the national debt was about $5.6 trillion. Now it stands
at about $8.6 trillion.